Karen Caswelch: Quality In High Gear

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When Karen Caswelch joined Allison Transmission as director of purchasing last year, she had no corporate purchasing experience. But her record in operations and quality management made her supremely qualified to carry out her number-one mission.

"The ultimate mandate," Caswelch says, "is to keep the plants running. And you've got to keep them running with high-quality material."

A division of General Motors, Allison produces automatic transmissions for trucks, buses, and off-road and military vehicles. When Caswelch arrived, one of her top priorities was to refine the way the company worked with suppliers to manage quality. Allison used to match each vendor with a single quality engineer. But that person became so preoccupied with current problems, there was no time to plan for the future.

Under such a system, Caswelch says, "you end up with the same number of quality problems on your future programs as you had on today's."

Now, each vendor works with two quality engineers—one to focus on current issues and one to prepare for upcoming manufacturing programs. This strategy has paid off: measured in problems per million opportunities, the quality of materials that suppliers ship to Allison's plants has improved by 60 percent.

Another improvement Caswelch introduced is a GM process called Grow, Fix, Exit, designed to reward vendors who offer the best goods at the best prices.

"You look across your entire supply base," she explains, "and put each supplier in a category"—those who should get more business, those who have problems that can be fixed, and those who should be cut from the list.

Caswelch would also like to forge tighter links along her entire supply chain, from her customers—including GM's assembly plants—to her suppliers.

In her previous job as director of global order to delivery for GM's Asia Pacific Operations, she worked to predict which products and options GM's customers would want, even before they placed orders. By tracking the research that customers conducted on GM's BuyPower web site, for example, her organization could gauge buyers' interests. GM could then work with suppliers to make sure they produced the right components, in the right volumes, to meet the projected demand.

For instance, Caswelch says, more truck buyers opt for four-wheel drive in the winter than in summer.

"But when you set up your assembly line, you set it up on the average. Which means you have too many people in the summer and not enough people in the winter."

For this reason, it's important to have a sensitive finger on the pulse of the market. At Allison, Caswelch envisions something similar. "Can we get the needs of our customers linked in Internet time to the schedules of our suppliers?" she asks.

The more customers plan ahead, the sooner Allison can work with suppliers to cut costs and avert potential problems. That, she says, "keeps you with leaner systems and less inventory in those systems."

The Big Questions

What are you reading?

I'm a voracious reader of romance books. I relax by reading, and to me, there's nothing better than a great love story.

What's in your briefcase right now?

Laptop, trade magazines, documents I have to sign, such as purchase orders,. There are also personnel-related documents, such as performance reviews and resumes.

Business motto?

Do the right thing for the company and, to some extent, let the personal impacts come where they may.

Advice for people starting in logistics?

What is acceptable today is not going to be enough tomorrow. You can't just live off what you did yesterday. Every year, the bar is going to be raised again.